Read and translate the following text.

The prices of raw materials and products change every day, so offers are usually only firm for about twenty-four hours. The prices of manufactured goods, on the other hand, remain unchanged, as a rule, for weeks or months, so buyers can place orders on the basis of a manufacturer’s printed price list.

There are many ways of selling manufactured goods to foreign buyers. A manufacturer may sell direct to wholesalers and maintain his own travelling representatives, or set up his own offices or companies abroad. Alternatively he may sell to an export merchanting house; in this case there is little financial risk for the producer, since the merchant acts as a principal and pays for the goods himself. A third possibility is for the manufacturer to appoint foreign agents, who will work on commission and may be stockists.

Answer the questions:

1. Why are some offers only firm for about 24 hours?

2. What prices remain unchanged for weeks or months?

3. How can a manufacturer sell his goods to foreign buyers?

4. In what case is there little financial risk for the producer?

5. What payment do foreign agents get for their work?

ROLE PLAYS

1. Discuss with your colleagues different methods of selling your goods abroad. Listen to their ideas and choose the best.

2. You have applied for the position of an agent distributing goods of a large company. Now you are having a job interview.

 

Marketing problems

1. Western companies had problems selling refrigerators in Japan until they changed the design to make them quieter.

2. In Saudi Arabia newspaper adverts showed an attractive hostess serving champagne to happy passengers. A lot of passengers cancelled their flight reservations.

3. A soap powder advertisement had a picture of dirty clothes on the left, a box of soap in the middle and clean clothes on the right. The soap didn’t sell well in the Middle East.

4. An airline company called itself Emu, after the Australian bird. But Australians didn’t want to use the airline.

 

Answer the questions on the topic:

1.What is marketing? What does it include?

2.What sales approaches do you know? What are the advantages and disadvantages of them?

3.What should be done to develop a sales network?

4.What are the duties of an agent? Does he get a salary?

5.Why is it so important to find the right person to be your agent?

6.What kinds of agents do you know?

 

 

Unit 8

An Agency Contract

PART 1

DIALOGUE 1

Mark Boland is head of an Australian import agency. He is discussing an agency contract with an American, Clint Marsden. Marsden is President of a company producing photocopying machines.

 

MARSDEN Before drawing up this agreement, I’d like to go over the contract terms once more, Mark.

BOLAND I've no objection to that. Even when you take notes as we did, it's easy to miss something out.

MARSDEN As I understand it, you'll be our agent for the whole of Australia. And you'll be handling our complete range of machines.

BOLAND Agreed.

MARSDEN Now the next point was … length of contract. It'll be three years, won't it?

BOLAND Yes, and, er, renegotiable, provided we're both happy with the arrangement.

MARSDEN I'm confident it'll work out all right. Let's see, what was the next point we discussed? Ah yes, whether you wanted a sole and exclusive agency.

BOLAND Uh-huh.

MARSDEN You don't want that, do you? You'll be selling competing lines along with our product.

BOLAND Yes. We agreed it won't really matter, as long as my sales force do the job properly.

MARSDEN I'm not worried about that. Your people are very profes­sional, I know. What next? Commission? Well, we fixed it at fifteen per cent (15%) on total sales, I believe.

boland Yes, but may I remind you that I'll be a del credere agent. I receive an extra five per cent (5%) commission for that.

marsden   Ah yes, you’re bearing the risk if customers don't pay. I’d forgotten that.

boland  I'm also responsible for invoicing customers and for credit control. I'll be sending you copies of all invoices for your records.

marsden  We must have those because we'll be sending you a state­ment every three months. Your commission will be based on it. We'll settle up by transferring the money to your account in Sydney. The Bank of Australia and New Zealand. Right?

boland Mm, Victoria Street branch.

marsden  The rest's fairly simple. Advertising, sales promotion — that'll be shared between us. Warehousing costs — we'll pay those, but you'll bear all office expenses. Last, but not least, after-sales service. That's your baby.

boland I promise you, Clint, we'll provide fast reliable servicing.

marsden Remember too, you've promised to keep adequate sup­plies of spare parts and accessories for the machines.

boland That's no problem, provided you get the parts to me when I ask for them.

marsden You can count on us for that.

Answer the questions:

1. What are Mark Boland and Clint Marsden’s positions?

2. Why do they want to go over the contract terms before drawing up the agreement?

3. What terms of the contract are being discussed?

4. What kind of agent is Mark Boland going to be? What are the advantages and disadvantages of it?

5. What will Boland be responsible for?

6. How long will the contract last?

7. Who will be responsible for invoicing customers and credit control?

8. What will the commission be based on?

9. How will they settle up?

10. Who will pay for advertising, sales promotion, warehousing, office expenses?

11. How will after-sales service be organised?

 

PART 2

DIALOGUE 2

It is two years later. Clint Marsden makes a special visit to Australia to talk to his agent, Mark Boland. Marsden is very dissatisfied with the agent's sales performance.

MARSDEN I'm sorry, there's no way I can break this news to you gently. I'm afraid we've decided to terminate our contract with you.

BOLAND You can't do that. There's still a year to run on it.

MARSDEN I know. But we hope you'll co-operate with us.

BOLAND Might I ask why you want to break the agreement?

MARSDEN Can't you guess?

BOLAND OK, I admit sales haven't come up to expectations. We haven't done too badly though. Three hundred grand last year. Or close to it.

MARSDEN Come on now, Mark, admit it, sales were well below target. We agreed on a market performance last January. Your sales objective was a minimum of five hundred thousand (500.000). Actually, seven hundred thousand (700.000) was a more realistic target.

BOLAND Huh! It's easy for you to talk. We're at the sharp end here. We have to fight for every dollar we make.

MARSDEN All right, it's not easy, I know. Look, it's not just that you failed to reach your sales target. Let's be honest, your after-sales service has been lousy. We've had dozens of complaints from customers... 

BOLAND That's news to me.

MARSDEN Really? We wrote to you about it. People saying they waited weeks for your sub-agent to make a service call. What do you say to that, uh?

BOLAND Yeah, maybe we have slipped up there. We shouldn’t have agreed to handle servicing for you. My organisation's not really geared for that sort of work.

marsden Why take it on then? After-sales service is vital to our success — you know that.

BOLAND Hold on, Clint! I It's not all my fault now, is it? You haven't exactly backed me up. I mean, I had no real incentive to sell your goods.

marsden What are you driving at?

BOLAND Well, you've only visited me twice in the last year. Not much, is it? And I've never been invited to your factory.

marsden Mm, mm... perhaps we should have set up some kind of visit. But what with one thing and another, I...

BOLAND Wait a minute, Clint. Let me have my say now. You promised to arrange joint promotions of your products. Nothing came of it, though. No wonder sales have been disappointing.

marsden  Mark, I admit there’ve been mistakes on both sides.

BOLAND All I'm saying is - can't you give me another chance? Sales are sure to pick up soon. The recession can’t go on for ever.

marsden Sorry. It's just not possible to do that.

BOLAND What if I refuse to cooperate?

marsden We can't keep you as our agent, Mark. No way!

BOLAND If I play along with you, Clint, I'll expect generous compensation.

marsden We'll look after you, don't worry. Actually, Mark. we're considering opening up our own sales office in Australia.

BOLAND Is that so? Well... you'd certainly have greater control over sales that way, I suppose.

marsden Yes. And a more committed sales force.

Answer the questions:

1. Why is Masden dissatisfied with the agent’s sales performance?

2. Why has he decided to terminate the contract?

3. How much were the sales below target? Why?

4. How well was the after-sales service organized?

5. Whose fault was it?

6. What other mistakes were made?

7. What should have been done to reach the sales target?

8. Why does Boland ask to give him another chance?

 9. Who will get a generous compensation and why?

10.What is Marsden’s company planning to open in Australia?

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